Student Loans

My NJCLASS Student Loan Debt is Overwhelming. What Are My Options?

Written by Steve Rhode


Dear Steve,

I’m looking for advice on lowering my monthly student loan payments. My borrower, NJCLASS, does not offer income-based repayment options, but I’m drowning. They don’t make it easy to refinance or defer either. I owe around $122,000. I make around 41k a year and my monthly payments are $1,454. It’s unmanageable.

Do I have any options for lowering my monthly payment? At this point, I’m already realizing I will pay for the rest of my life so I really just need to get my monthly payments lower so I can live /afford to eat. Any advice? I’ve been regularly paying for about three years now and I’ve been unable to put any money into savings. Is just stopping paying really a viable option?



Dear Rebecca,

I’ve written about NJCLASS before. I don’t know why they have been such a mess. The State of New Jersey has had to step in and create new laws to try to get students some assistance with them.

NJ is supposed to create an Office of the Student Loan Ombudsman in the Department of Banking and Insurance. It does not look like it is operational yet but it should open soon.

That office is supposed to assist NJ residents to resolve student loan issues. Unfortunately, your situation may not fit neatly under their legal mandate.

NJCLASS loans offer such limited options. Basically they allow you to make the contractual monthly payments, interest-only payments while in school, or deferred principal and interest payments while in school. – Source

While NJCLASS (New Jersey College Loans To Assist State Students) does offer a financial hardship forbearance, it just makes the debt problem worse.

Under the Financial Hardship Forbearance Relief Request there are two very important facts:

  • If approved for the Financial Hardship Forbearance Relief, interest will continue to accrue. If interest payments are required, interest bill statements will be sent to the borrower in accordance with the terms and conditions of your promissory notes.
  • Maximum allowable time periods for a financial hardship forbearance shall not exceed six months for loans with a 10‐ year repayment term, 18 months for loans with a 15‐year repayment term, 24 months for loans with a 20‐year repayment term, 30 months for loans with a 25‐year repayment term, and 36 months for loans with a 30‐year repayment term.
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If you don’t make at least the interest payments the balance of your already unaffordable debt will increase.

Their website also says, “If you default on an NJCLASS loan, you may lose your eligibility for any State Tax refund or rebate, such as Gross Revenue Tax refunds or Homestead Rebates. If you play the lottery, your winnings can be redirected to HESAA to pay down your debt. Your account will also be assigned to a collection attorney, who will initiate litigation and may seek a judgment to obtain repayment of the debt, which may result in additional costs being added to your account balance, such as attorney fees and other costs.”

Defaulting on your student loan debt is not a solution that would be advantageous if you could some repayment plan that the lender would approve and you could afford.

However, if you can’t afford the payment then we have to deal with that. When you default your options range from being sued to negotiating a settlement either before, during, or after legal action. But even in a settlement attempt, it has been reported to me that NJCLASS loans are not awesome to work with.

There are companies like Earnest, SoFi, Laurel Road, Credible, etc. who will refinance loans like NJCLASS into a new loan but there is no way to predict what your payment will be unless you verify your rate with them directly.

The bottom line here is NJCLASS loans have few options and only by getting facts from a refinance lender can you let the math show you if it is a good idea or not.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


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